For years to come, there will be a discussion about winners and losers and how the pandemic has changed businesses and consumers. There are obvious winners, like Amazon, Apple, Google, Facebook, Netflix, and Hulu. It is easy to track these companies’ dramatic increases in valuation over the last 18 months.
But basic companies that keep the economy moving, such as logistics, critical metal, and food processing, have come to play an even more critical role in the economy and have seen a huge increase in their valuations.
Main street businesses are reshuffling and finding new niches. However, we do not know how this will all finally shake out for small businesses. Some may never return to their pre-pandemic sales levels. Other businesses have found ways to reach more customers. Social media and technology have opened up new opportunities for small businesses that did not exist even five years ago.
A new crop of start-ups are addressing the shift to online work and creating decentralized networks based on blockchain technology, which is less vulnerable to domination by giant tech firms. Companies like Lokinet, Ethereum, Odysee, and Urbit seek users’ ownership over their data. As a result, the “middle man” in these business models is getting squeezed.
The other good news, after a decade of decline, is that there has been a surge in new business start-ups, with over 4.4 million new start-ups (an average year is 3.5 million). Also, the “ghost kitchens and take-out only market” is set to become a trillion-dollar industry by 2030. Reshoring is going to drive job creation in the United States. So, here are four trends emerging from the pandemic for businesses:
1. The techno-economy is growing exponentially. New businesses and business models are arising from the pandemic. Ghosts kitchens are emerging and new social media platforms that are driven by personal privacy are gaining followers. Demand for labor and products is providing opportunities across a broad spectrum of start-ups and new workers.
2. Trends in demography and technology will enable workers to make more, even as business margins improve. The drop in the birth rate in the U.S. and the shrinking workforce will change how businesses attract, train, and retain employees. Currently, there are 7.4 million job openings in the United States.
3. The pandemic’s short-term financial impact on wealth for middle-income workers will force them to stay in the workforce longer. In addition, one in every three Americans plans to delay retirement because of the pandemic.
4. The resurgence of American manufacturing, logistics, and home building will further improve the prospects for skilled workers. There will also be an opportunity for those who are willing to acquire new skills and work hard.
Things will never go back to “the way they were before” the pandemic. Some businesses and individuals will be wildly successful, and others not so much. Over time, success will depend on creating better conditions for growing adaptive businesses and creating the environment for start-ups that will better the lives of customers, consumers, employees, and business owners who risk capital.